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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
The futures got whacked half as hard as they did last Thursday, putting in a shaky low just 80 cents above our 1188.70 target (a midpoint pivot). Because the bounce so far has been feeble, however, we should be prepared for a further fall to at least 1162.30 if 1188.70 is breached decisively or if the futures closed beneath that number. Alternatively, and once again, buyers would need to pop the August contract above 1222.90 to put bulls back in command. ______ UPDATE (10:17 a.m. EDT): Gold is struggling for altitude after bottoming overnight at 1185.00. That is bearish, but we’ll use a close below 1188.70 as our bear trigger. In the meantime, it would only take a pop to 1198.50, just $3.10 above today’s so-far recovery high, to turn the hourly chart bullish. ______ FURTHER UPDATE (1:28 p.m. EDT): The pop above 1198.50 should be discounted, since it took several running starts to achieve. The move is impulsive on the hourly chart, but not very impressive.
The futures breached a midpoint support by two cents, implying more weakness to come, but the surprisingly sharp reversal that followed looked more like Silver wanted to fly. A recalcitrant Gold appeared to restrain the impulse, however, and the September contract ended the day in a holding pattern that left it unchanged since last Thursday. On balance, my bias is negative for the short-term, with jeopardy down to as low as 17.160 if the futures should close below 17.635. Alternatively, a thrust today exceeding 17.935 would offer the first hint of incipient strength.
Yesterday’s synthetic rally was 80% over by the opening bell, and once the session began it took sellers less than an hour to start piling on. Yet again, however, we shouldn’t count DaBoyz out, since there are obviously more than a few panicky shorts still alive. They’ll get what they deserve for a second straight day if the futures should push above 1027.50, since that would refresh the bullish impulse on the 15-minute chart. More bullish still would be a move above 1031.50, the midpoint resistance of the pattern begun from yesterday’s low. It projects as high as 1049.25. If the futures should unexpectedly delight by falling, the key support lies at 1014.75, a midpoint pivot. _______ UPDATE (10:22 a.m. EDT): DaBoyz have shorts by the scrotum once again, but their success has been limited and labored, since the futures have yet to pierce yesterday’s high, 1038.50. The 1049.25 target is very much in play, but I’d suggest keeping a close eye on the 1-minute chart nonetheless, shorting the first abc downtrend, since the squeeze is so noticeably lacking in power.
We hold two August 98 puts for 1.06 and four July 96 puts for 0.70. Close out the July puts if DIA exceeds 97.68, since that’s where the five-minute chart would turn ever-so-slightly menacing for bears. Otherwise, we’ll continue to hold for a possible relapse down to the 95.42 target given here earlier. If a rally makes it to 99.06, I’ll put out an advisory, since we’ll want to lay in some more August 98 puts on any ostentatious show of ”strength.” _______ UPDATE (9:41 a.m. EDT): The market looks like hell, unable to capitalize on the feeble short squeeze that had developed overnight. Still, not wanting to take chances owning soon-to-expire puts into even a wafting uptrend, we sold the Julys for 0.97. Imputing the profit thereof to our cost basis for the August 98 puts brings them down to 0.52 apiece. Incidentally, the Diamonds made a tradable top at 99.08 early in the session before pulling back 47 cents. You’d have to have caught the short on your own, however, since I was unfortunately too busy putting out fires at the time to publish a bulletin. _______ FURTHER UPDATE (1:19 p.m. EDT): DIA has gotten second wind as of this moment and is presumably headed toward a top equivalent to the one at 1149.25 that I’ve projected for the E-Mini S&P. Since DIA has exceeded any target I can project for it today, I’ll suggest buying four more August 98 puts if and when the E-Mini S&Ps reach 1149.25. _______ FURTHER UPDATE (4:03 p.m.): We bought four more puts as advised, for 2.65. This gives us an average price of 2.13 for the six now held. No further action is suggested at this time. _______ FURTHER UPDATE (1:13 p.m. EDT): In the chat room, I’ve recommended shorting two August 102 puts for 3.70 against our position.
Musta been Tesla owners scarfing up stock above $30 the other day. Anyway, their over-eagereness could be your good fortune if you held out patiently for a better opportunity. As the accompanying chart makes clear, the best place to lowball a bid would be around 12.95, a clear and compelling Hidden Pivot support. If you’re playing this one for the long-term, a 15-cent stop-loss would be appropriate. Beware of an intervening rally to the 18.03 Hidden Pivot midpoint, though, since odds of a trend failure there would be high. _______ UPDATE (July 15): With TSLA moving back above $20, a fire-sale opportunity at 12.95 seems remote. We’ll put this one on the back burner for now.
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Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
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A Dire View of the Gulf Oil Gusher
by Rick Ackerman on July 7, 2010 12:01 am GMT · 81 comments
[The exceedingly gloomy analysis of the Gulf oil-gusher that ran here yesterday elicited many interesting comments. Generally speaking, and much to our surprise, readers did not reject the author's doomsday thesis out-of-hand. We are airing Erich Simon's article for a second day in the hope that it will generate further, enlightening discussion. The environmental health of the planet may hang in the balance, as many seem to understand. As of this moment, however, no one can say for certain that the "fix," a relief well due to be completed by August, will save the day for Mother Earth. RA ]
With U.S. military Insiders (BP shills in tow) now close enough to peer over the Continental Shelf, down the sloping, innocuous, white sandy overlay into millions of years of sediment covering who-knows-what, they are still unable to see further into the miles of drill casings inside the ‘relief’ bores – unable to look into the fiery bowels of a sleeping enemy whose size and power once unleashed can turn humans into frozen statues. Meanwhile, the latest qualitative, operational drivel continues to escape both sides of BP’s mouth.
Here they are, the Masters of Deep-Earth Exhuming, standing mere feet across a line from their target, and nothing is slated until August under the auspices of a “delicate” operation. Is drilling into the side of a hundred million atomic bombs…delicate? After all, the reddish-black oil » Read the full article